Indigenous peoples in the Lower Omo Valley are placed at great risk due to the dam's regulation of the river flow, which will lead to the elimination of the river’s natural flood cycle. Downstream farmers cultivate the river's banks after the annual flood, a practice known as flood retreat cultivation. The annual flood also supports the renewal of grazing lands for herders, and signals migratory fish species to begin spawning. Without adequate mitigation, the dam will cause food insecurity, chronic hunger, poor health, food aid dependence, and a general unraveling of the region’s economy and social safety net. The dwindling of resources caused by the dam would increase conflicts between local ethnic groups.

The project proposes an artificial flood to mitigate these impacts. However, the proposed flood would last only 10 days, while the natural flood builds gradually over several months, until it peaks in August or September. A truncated 10-day flood would not reach all the areas now nurtured by annual flooding, and would likely fall far short of supporting current agricultural productivity. The artificial flood would also depend on the goodwill of the dam operator. This would create a conflict of interest, since the artificial flood would eat into the operator’s profits. Even if implemented, the artificial flood is so inadequate that it would fail to maintain the local ecology, livelihoods and economy.

The dwindling of resources caused by the dam would increase conflicts between local ethnic groups. Firearms are already omnipresent amongst the region’s communities. But the dam is just one factor in a perfect storm rapidly descending on the Lower Omo Valley. The government of Ethiopia is exploring the area for oil and minerals and planning large-scale agricultural and biofuel schemes, which could further fuel conflicts over traditional land and water resources. The area is also home to the Ilemi Triangle, a volatile area of disputed national borders between Ethiopia, Kenya and Sudan. As traditional resources diminish and government land use increases, latent tensions could erupt.

Project-affected people, NGOs and academics perceived as critical of Gibe 3 risk government-sanctioned retaliation. The poor consultation process, coupled with extreme marginalization of many affected groups, has greatly reduced the chance for critical concerns to be raised and addressed. Project developers have made virtually no information publicly available in Ethiopia to date, leaving Ethiopian civil society uninformed about the project’s potential risks and impacts. Local media coverage has only emerged after critical international coverage appeared in March 2009.

Lack of democratic space
The political atmosphere in Ethiopia has further restrained public debate. A Gibe 3 field investigation report released by USAID in March 2009 noted: "The current political landscape for civil society/NGOs remains difficult in the aftermath of the May 2005 parliamentary elections. This political environment discourages public discourse on development issues, including both energy policy and projects to implement the policy. An NGO law passed in early January 2009 is the most recent attempt to weaken civil society’s voice and disengage civil society from the policy-making process. The new law heavily restricts the thematic areas where civil society organizations can operate and places funding restrictions on local NGOs by international NGOs. The areas that are compromised include governance, civil society, and human rights issues."

The World Commission on Dams found that women and ethnic minorities were disproportionately affected by dam projects. As women are often responsible for ensuring the sustainable livelihoods of their families, impacts on these livelihoods through destruction of fisheries, flooding of agricultural land and forests, and displacement often result in women bearing a disproportionate share of the costs. It is women who are often left with the burden of caring for their families, finding alternative land and water sources and alternative livelihoods when these are taken away through the development of destructive dam projects.

The Omo River and Lake Turkana constitute the Omo-Turkana Basin, shared by Ethiopia and Kenya. The Gibe 3 Dam poses serious hydrological risks to Lake Turkana, which receives up to 90% of its water from the Omo River. An oasis of biodiversity in a harsh desert, Lake Turkana supports 300,000 people and rich animal life. Hundreds of thousands of fisherfolk and pastoralists will be affected if the lake’s fragile ecosystem is stressed to the brink of collapse. Over recent years, the lake has been shrinking and becoming progressively more salty, leaving the region highly vulnerable to climate change impacts. If the water level continues to fall, the lake’s fragile balance could be destroyed.

Transboundary Impacts
The Omo River and Lake Turkana constitute the Omo-Turkana Basin which is shared by Ethiopia and Kenya. Still, project preparation has fully ignored Kenya's customary downstream water rights in this shared river basin. No documentation indicates that the government of Kenya was informed of the dam's impacts to Lake Turkana.

Violation of national and international standards
The construction of the dam violates the UN Declaration on Indigenous Peoples and the Convention on Biological Diversity, and it does not comply with any of the seven strategic priorities of the World Commission on Dams. Moreover, in violation of the Ethiopian Constitution, the affected communities were not properly consulted and have not received any information about the project being implemented on their land.

Gibe 3 construction began in 2006. In its rush to construction, the government of Ethiopia neglected to properly assess economic, technical, environmental and social risks, violating domestic laws and international standards. In July 2006, the government of Ethiopia directly awarded a no-bid Engineering, Procurement & Construction (EPC) contract for Gibe 3 to Italian construction company Salini. According to Transparency International, large public works projects are one of the world’s most corrupt sectors, and no-bid contracts are an open invitation to corruption. The contract, worth EUR 1.55 billion (USD 2.11 billion), violates Ethiopia’s Federal Public Procurement Directive, which requires international competitive bidding. In July 2008, Ethiopia’s Environmental Protection Authority approved the Gibe 3 Environmental and Social Impact Assessment (ESIA). In January 2009, EEPCo released a final version of the documents. These documents have been criticized for their poor preparation and belated release two years after construction began – a flagrant violation of Ethiopian environmental law, which requires an impact assessment be approved prior to construction.

Ethiopia's Hydro Dependence
If Ethiopia carries out its current energy development plans, the country will soon be more than 95% dependent on hydropower. Extreme hydro dependence leaves Ethiopia’s power sector vulnerable to drought, an increasingly risky scenario due to climate change. Falling reservoir levels will affect Ethiopian electricity consumers and export revenues.